Customer Data is Your Biggest Advantage

The advantage: the widespread adoption of online tools to research, compare, validate, rate/review, recommend, and make purchases rewards data-driven organizations.

Customer loyalty programs are rich with information about what people want to do. Only when they are conceived and executed to make it easy for customers to transact their points and rewards frequently, they become a valuable source of customer intelligence.

The more exchanges of points and rewards for goods and services, the more your business learns about that customer preferences. What three free items is she choosing with her online order? How about over time -- a number of orders? Do free samples lead to full product purchases?

Smart businesses learn about their customers and adapt offers to their preferences. They connect the data crumbs through transactions.

The irony of most frequent flyer mileage programs is that they provide incentives on the wrong side of the data equation -- they encourage people to stockpile the miles in the hope they will fly frequently enough to redeem them.

Yet, it has become harder and harder to make those transactions.

Amazon's e-commerce system is light years ahead of any competition for this very reason -- the company owns data about what people buy. Amazon stores information about preferences revealed through transactions over time. Recommendations based upon past purchases encourage more transactions and so on.

Amazon not only gets net natives, thanks to its transaction-based data, it may be poised to leverage that knowledge beyond its sites.

While Google's $38 billion business sells ads based on how people search and browse the Web, and Facebook uses what it knows about its one billion users to sell targeted ads, Amazon knows purchase intent.